JEFFERSON CITY • The state's largest employee pension system is on track to save an estimated $90 million as part of a buyout program for former employees.
According to data provided by the Missouri State Employees Retirement System, 3,748 former state workers - from prison guards to social service workers - signed up to receive a lump sum payment rather than wait for a monthly pension check to begin arriving when they reach retirement age.
The average amount of each check is expected to be about $14,000.
First-year savings are expected to be $2.5 million.
The program was approved by lawmakers earlier this year as part of an effort to reduce the system’s long term liabilities.
One of its champions, Treasurer Eric Schmitt, who sits on the MOSERS board of directors, said the buyout plan was a “fiscally responsible reform.”
“I'm committed to continuing to work with stakeholders to find innovative ways to address the pension crisis which is now on our state's doorstep,” Schmitt said.
The program ended Nov. 30 after MOSERS sent letters to more than 17,000 former state employees asking if they wanted to forego receiving a monthly pension check when they reach the age of 62 and instead take a lump sum payment worth about 60 percent of their normal annuity.
For the former workers, taking the buyout will mean giving up cost-of-living adjustments that come with their monthly checks. It also would remove some of the certainty that they have in receiving a steady flow of checks as they age.
For MOSERS, the move could help shore up a pension system that is operating at about 69 percent of full funding, with the savings coming because MOSERS is paying out a percentage of what a regular pension would be worth over time and will no longer have to pay the administrative fees associated with tracking all 17,000 beneficiaries.
The program was available only to ex-state workers who left the payroll before June 30 and were not already receiving pension benefits.
MOSERS said the average age of a former employee who took the buyout was 47. The average time they were state workers was nine years and the average monthly benefit they forfeited was $380.
As of Tuesday, more than 2,000 of the checks had been mailed out.
At the pension system for Missouri Department of Transportation workers and highway patrol employees, the buyout was offered to 2,192 former employees.